Microsoft, Novell Truce Troubled

There has been a great deal of activity regarding the partnership between Microsoft and open-source software platform manufacturer Novell. As previously reported in this newsletter, the recently announced business and technical collaboration agreements between the two companies intend to make Novell and Microsoft products more compatible and provide each other’s customers with patent coverage for their respective products. Microsoft committed $286 million to the deal.

The agreements were stated as being in place until 2012, but now one wonders whether they’ll be in place through next year. Microsoft CEO Steve Ballmer has made public comments that assert the deal proves Microsoft’s intellectual property does exist in Linux operating systems. Novell, in turn, issued an open letter to the Linux and open-source community, saying the deal is in no way an acknowledgment that Linux infringes on any of Microsoft’s intellectual property.

The letter from Novell CEO Ron Hovsepian, dated Nov. 20, read in part, “Since our announcement, some parties have spoken about this patent agreement in a damaging way and with a perspective that we do not share. We strongly challenge those statements here.

“We disagree with the recent statements made by Microsoft on the topic of Linux and patents. Importantly, our agreement with Microsoft is in no way an acknowledgment that Linux infringes upon any Microsoft intellectual property. When we entered the patent cooperation agreement with Microsoft, Novell did not agree or admit that Linux or any other Novell offering violates Microsoft patents.”

Novell officers later said in interviews that these patent agreements — at least on Novell’s side of the deal — are intended to allay the fears of any potential Novell customers who are apprehensive about adopting Linux because of intellectual property issues, regardless of whether such issues actually exist. The company has since appointed Susan Heystee, vice president and general manager for Global Strategic Partners, to manage the company’s agreements with Microsoft. Assigning this task to Heystee, who already manages Novell’s relationships with IBM, HP and Dell, underscores how important the proper management of the agreements is to the company.

There has been no official statement from Microsoft, but since Hovsepian’s statement was issued, Microsoft officers have said in interviews that the larger point of these agreements is not who owns what, although that is still a sticking point. Rather, Microsoft is making the development process of both more collaborative, adding that this is being done at the prompting of Microsoft customers themselves.